1. We have made a significant progress in characaterizing the pathology and abnormal biochemistry of the murine model of Niemann-Pick disease that was identified and developed here. 2. The genetic defect has been shown to be transmitted by bone marrow engraftment into non-involved mice. 3. The metabolic defect in this condition has now neen reproduced in cultured skin fibroblasts and the relationship between the accumulation of cholesterol in lysosomes in these cells and the reduction of sphingomyelinase activity under investigation. 4. Elucidation of the mechanism of inhibition of this enzyme by cholesterol should provide a better understanding of the pathogenesis of Niemann-Pick disease which is characterized by deficient sphingomyelinase activity with accumulation of sphingomyelin and cholesterol in the tissues of these patients.